Hundreds of billions of dollars were wiped out of the crypto market on Tuesday, following an industry-wide crisis that saw the values of key cryptocurrencies, such as bitcoin, ethereum, Cardano, and Solana, drop and fall drastically from near-record highs this week.
On Tuesday morning, the price of bitcoin was about $60,500, down 8% from the previous day.
Most prominent tokens, including ethereum, XRP, Cardano, Solana, and dogecoin, have had similar severe decreases in the previous 24 hours, with most falling between 7% and 10%.
XRP, Polkadot, Dogecoin, and Shiba Inu coin—the next four most valuable cryptocurrencies by market capitalization, excluding another stablecoin, USD Coin—all plummeted 9.3%, 12.4%, 8.8%, and 6%, respectively.
The losses are part of a bigger collapse in the crypto market, which is now worth $2.76 trillion, down 8.6% from the previous day.
Bitcoin fell less than a week after reaching a new all-time high of $69,000. This was part of a bigger surge that occurred after a market crash earlier this year, in response to China’s tightening regulatory environment and growing concerns about bitcoin’s environmental impact. The fall, which was fuelled by a variety of causes including an inflow of retail investors, increased ways to trade digital currencies, and the rising popularity of meme stocks and tokens spurred by internet forums like Reddit and celebrity endorsement, wiped away many of the profits earned during the outbreak.
It’s unclear why the Bitcoin market is plummeting, but a number of factors might be at work. On Tuesday, Chinese officials intensified their efforts to curb crypto mining, citing the process’s high energy consumption and carbon footprint as reasons. Following China’s prior crackdown on cryptocurrency mining, a substantial number of miners departed the country, with many settling in the United States. Reactions to President Joe Biden’s infrastructure program, which includes provisions for perhaps regulating and taxing bitcoin, might also play a role.